Archive for category Daily Service
Forbes article by Robert W. Wood
The IRS filed a $369,249 federal tax lien against Vanessa Williams, saying the singer-actress owes the federal government that amount on her 2011 earnings.
Tax liens aren’t fun, and no celeb or anyone else likes the embarrassment, much less having to pay. The lien was filed on August 13, 2014, as this copy of the federal tax lien reveals.
Williams, 51, has had a storied and successful career. This lien could just be a kerfuffle between notices and her advisers, but it’s still serious. Tax liens can be about income, property, or even estate taxes. They can be state, federal or local. And they are all about getting paid.
Celebs can often be in this position. Despite high earnings, their tax bills may slip through the cracks. Take Lindsay Lohan, whose missed bills lead to a $94,000 tax lien. Notices start the process.
In fact, the IRS can file a Notice of Federal Tax Lien only after:
- IRS assesses the liability;
- IRS sends a Notice and Demand for Payment saying how much you owe; and
- You fail to fully pay within 10 days.
The IRS automatically has a lien and files notice so creditors know. IRS tax liens cover all your property even that acquired after the lien filing. The courts use it to establish priority in bankruptcy proceedings and real estate sales.
IRS liens last 10 years, and usually release automatically if IRS has not refiled them. However, you’re better off to get them removed immediately. Getting the IRS to release a lien usually involves: (1) paying the tax, interest and penalties; or (2) posting a bond guaranteeing payment. Even then the IRS may take 30 days. State or local government charges to file and release the lien are added to the amount you owe. See IRS Publication 1450, Request for Release of Federal Tax Lien.
Entertainers aren’t the only ones with tax lien problems. Case in point? The embarrassment over tax liens on Newt Gingrich. But liens and seizures aren’t the same. The lien just makes sure the IRS eventually gets paid. A seizure means now.
The Treasury Inspector General for Tax Administration (TIGTA) reviewed a random sample of 50 of 738 IRS seizures conducted from July 1, 2011, through June 30, 2012. In the majority of seizures, the IRS followed all guidelines. However, in 15 seizures, TIGTA identified 17 instances in which the IRS did not comply with a legal mandate of the tax code. The legal errors included:
The sale of the seized property was not properly advertised. (Section 6335(b));
The amount of the liability for which the seizure was made was not correct on the notice of seizure provided to the taxpayer. (Section 6335(a));
Proceeds resulting from the seizure of properties were not properly applied to the taxpayer’s account or seizure and sale expenses were not properly charged. (Sections 6341 and 6342(a)); abd
The balance-due letter sent to the taxpayer after sale proceeds were applied to the taxpayer’s account did not show the correct remaining balance. (Section 6340(c)).
But occasionally, even the IRS gets a lien wrong, as occurred when Dionne Warwick proved IRS tax liens can be wrong. Bottom line, it pays to check everything carefully.
Posted by: Steven Maimes, The Trust Advisor
Bloomberg News article by Craig Torres and Christopher Condon
Federal Reserve officials benefited from gains in asset prices that have boosted the wealth of millions of other Americans, financial disclosure reports show.
Fed Chair Janet Yellen’s assets were valued at $5.3 million to $14.1 million last year compared with a range of $4.8 million to $13.2 million in 2012, according to financial disclosure documents released today. The assets are listed in ranges, so determining a precise valuation isn’t possible from the documents.
The Fed is winding down the most aggressive U.S. monetary stimulus in history, which has benefited stock and bond markets over the past several years. The Standard & Poor’s 500 Index rose about 30 percent in 2013 and is up 8 percent so far this year. The $42.8 trillion global bond market lost 0.3 percent last year, according to the Bank of America Merrill Lynch Global Broad Market Index.
Yellen and her husband, Nobel laureate economist George Akerlof, reported a mix of investments, with individual stock holdings in companies such as Houston-based ConocoPhillips, the third-largest U.S. energy company, and a variety of mutual funds.
Low interest rates have punished savers, pushing them into higher-yielding, riskier investments. The Fed chair also had a stake in the Vanguard High Yield Corporate Fund, which invests in high-yielding corporate debt. Yellen also has investments in savings plans at the University of California, Berkeley, where she was a professor. She joined the faculty in 1980.
Her disclosures again noted that she has a stamp collection valued at $15,001 to $50,000, unchanged from the range in previous filings.
Jerome Powell is one of the richest Fed governors with 2013 assets in a range of $15.5 million to $36.3 million. Powell’s records show dozens of sales of stocks such as Adidas AG, the German sportswear maker, Allianz SE, the Munich-based financial company, and UBS AG, the Zurich-based financial company.
Powell, like many other individual investors, is becoming more diversified, said George Padula, a principal in Boston at Modera Wealth Management LLC.
Powell’s records showed purchases of stock-focused exchange-traded funds with as much as $1.5 million newly invested in these products. That included $365,000 to $800,000 placed in ETFs that track stock indexes in developed markets globally.
ETFs are bundles of securities that trade on an exchange like stocks. They typically track an index of stocks, bonds, commodities or currencies.
“The growth in ETFs has been huge,” Padula said. “They’re efficient, easy to use and transparent.”
Federal ethics rules prohibit Fed Board employees from owning debt or stock in banks, although there are exceptions for diversified mutual funds and pension or retirement funds that have independent managers.
“The small foreign bank holdings on Gov. Powell’s 2013 financial disclosure form were in two trusts — one a charitable trust and the other a trust for a minor child,” said Fed spokesman Joe Pavel in an e-mail. “The holdings were acquired without his knowledge and, upon discovery, the small holdings were liquidated under the direction of an independent money manager.”
Powell was a partner at The Carlyle Group, a private equity firm, from 1997 to 2005. He took office as a Fed governor in May 2012, and was reappointed and sworn in for a second term this year.
Daniel Tarullo, the Fed governor in charge of bank supervision and regulation, reported assets of $1.86 million to $4.41 million.
They included a number of retirement-oriented investment accounts and annuities. He held $50,000 to $100,000 in the Clearbridge Large Cap Growth Fund, a stock mutual fund; $250,000 to $500,000 in the Dow Jones Target 2015 Fund, a fund designed for savers aiming to retire in or near 2015; and $250,000 to $500,000 in common stock of Mathematica Policy Research Inc., a Princeton, New Jersey-based provider of research and data on public policy issues from health care and education to nutrition and employment.
Fed Vice Chairman Stanley Fischer and Governor Lael Brainard weren’t required to disclose another set of 2013 assets because they already released their information as part of their nomination process. Both joined the Fed board this year.
Fischer, prior to his May Senate confirmation to the Fed Board, disclosed assets of as much as $56.3 million and said he would sell his shares of financial companies including BlackRock Inc. if confirmed.
Other Fed millionaires include New York Fed President William C. Dudley, with assets of at least $9.5 million, and Richard Fisher of Dallas, with at least $25 million. Among Fisher’s assets is a 4,176-acre ranch valued at more than $1 million.
At the lower end of the wealth scale are Boston’s Eric Rosengren, who reported assets valued at $54,005 to $450,000, and James Bullard of St. Louis, with $52,003 to $350,000.
Greenbaypressgazette.com article by Carissa Giebel
What does it really mean to inherit in trust?
Beneficiaries can inherit in one of two ways. The first way, and most common, is to inherit assets outright, where the assets are distributed free and clear from all oversight and directly to the beneficiary. A check is made payable to the beneficiary or assets are titled in the beneficiary’s name, and the beneficiary does as he or she wants with the inheritance.
Alternatively, a beneficiary can inherit in trust. This can mean a lot of different things, but most often, it means that when the deceased created an estate plan, it was established so that the beneficiaries did not inherit outright, but rather in trust. This means the assets that are inherited are titled in the name of a trust, rather than the beneficiary’s name. The structures of these inherited trusts vary widely.
Some trusts are designed so that the assets in the trust are protected for the beneficiary from things such as a potential divorce, creditors, lawsuits, bankruptcy, etc. These assets do not become marital property with the beneficiary’s spouse, and they are protected from any personal liabilities of the beneficiary. The assets are for the beneficial use of the beneficiary, and distributions can often be made to the beneficiary for health, education, maintenance, and support, or otherwise, as determined by the trustmaker. Often times they are set up so that when the beneficiary reaches a certain age, they can become their own trustee, having full control over the assets and making distributions to themselves whenever they choose. Prior to reaching that certain age, another person acts as trustee, either a trusted person or a professional trustee.
Sometimes a trust will prohibit distributions for certain things, or allow distributions only for specific purposes, such as education. If a beneficiary is (or likely will be) on any state or federal benefits, a special needs trust may be created, prohibiting distributions for anything that the beneficiary’s benefits would otherwise pay for. These trusts also prohibit the beneficiary from ever being his or her own trustee, which is usually required in order to maintain any benefits.
Trusts can be structured so that when the beneficiary reaches certain ages, the trustee makes distributions from the trust outright. For example, the trust may say that the beneficiary receives 1/3 of the trust assets at age 23, 1/3 at age 25, and the remaining balance at age 27. The purpose of a trust like this may be to protect the beneficiary from receiving a large sum at once and preserving the trust assets over a period of time. However, once a distribution is made to the beneficiary, it’s no longer protected from the beneficiary’s personal liabilities. Also, if the beneficiary has reached the age for the final distribution when the assets are inherited, (e.g. has reached the age of 27) the trustee must distribute all the assets to the beneficiary, and none are inherited in trust.
A trust can also be created by the court if a person passes away, leaving assets to a minor. This trust would then hold the assets until the beneficiary reaches the age of majority. Until then, a trustee, appointed by the court, controls the assets and has the responsibility of making distributions to the beneficiary.
Inheriting in trust can mean a lot of different things, but usually comes with benefits that are not available otherwise. Consider establishing an estate plan so your beneficiaries can inherit in trust.
- Carissa Giebel is an estate planning attorney and partner at Legacy Law Group, LLC.
Posted by: Steven Maimes, The Trust Advisor
Forbes article by William Baldwin
Some assets are terrific holdings in estates. Go to your grave clutching them.
Some are bad for heirs. Play hot potato with them during your senior years.
What follows is a tax ranking for retirement assets. At the top: the holdings you should hang onto as long as you can. At the bottom: the holdings that you should be most inclined to cash in when you need to pay the rent.
Key assumption: You have more than enough savings to live on, so it’s likely you will be leaving something to children and grandchildren. Your objective is to keep your family’s tax burden as light as possible.
The important element of the tax code that drives our ranking is called “step-up.” Appreciated assets left in your estate get stepped up in tax basis when you die, with the appreciation never taxed. If you buy a Google share for $100, hold on for more than a year and die when it’s worth $1,000, then neither you nor your heirs will owe income tax on the $900 capital gain. If they sell two months later for $1,015, their gain is $15.
The main focus here will be on income taxes owed by either you or your descendants. Inheritance taxes, for most families, are far less important. The federal estate tax applies only to larger estates ($10.6 million, if held by a married couple), and a lot of states don’t tax estates.
Most of the choices described below won’t affect estate taxes. In the Google example, the share goes on an estate tax return at its $1,000 market value. Roth and other IRAs are subject to the estate tax.
My ranking is based, in large part, on a white paper put out a year ago by AllianceBernstein. The experts at this firm are wealth managers, not tax attorneys, but their investment advice is very tax-wise. They won’t be doing your tax return but they might be telling you why, for tax reasons, you should hold onto that master limited partnership they put in your portfolio.
Here’s the ranking, beginning with a buy-and-hold item and ending something that you should get rid of tomorrow.
1. Depleted partnerships. Let’s say you buy Enterprise Products Partners (EPD) at $39 for the dividend. Over the next decade it pays out $15, but depreciation charges on the company’s pipelines shelter much of the distributions. And so (we will suppose for illustration) only $3 of your payout is taxable. The other $12 represents a nontaxable “return of capital.” That reduces your basis, or tax cost, from $39 to $27.
Now let’s say you sell, in 2024, at $44. You think you have a gain of only $5, but the IRS will have a harsher view. Your gain is $17. Of this, $5 will be taxed at the favorable rates for long-term capital gain. The other $12 is going to show up as a “recapture” of depreciation and get taxed at stiff ordinary-income rates.
So don’t sell your partnership shares. Hang on.
In 2024 you get run over by a cab on the Upper West Side. Your children inherit the EDP at its stepped- up value. If they sell, both the $10 of capital gain and the $25 of recapturable income are forgiven. If they keep the shares, their basis, which is a starting point for depreciation calculations, is $88. As a result, more of their dividends are sheltered than yours would have been if you had lived.
The taxation of partnerships is complex and sometimes counterintuitive. The important thing to know is that you should buy publicly traded partnerships only when you are in or near retirement, and you should cling to the shares. There is more on the tax theory here.
2. Collectibles. This category includes artwork, gold, and gold bullion funds (but not shares of gold mining companies). Long-term gains get taxed at a 28% rate, not the 15% or 20% rate that usually applies to stocks and bonds. So, other things (like the percentage gain in the asset) being equal, collectibles are things to keep and assets like stocks are things to sell.
3. Highly appreciated stock. If you are sitting on a ten-bagger, keep sitting on it if you can.
4. Roth money. Once you have paid the income tax on your IRA or 401(k), turning it into a Roth account, you and your heirs are home free for income taxes. Money compounds inside the account tax-free. Withdrawals are tax-free. You are under no obligation to withdraw from the account, and your heirs are entitled to the leisurely withdrawal schedule set out here.
All this makes a Roth a desirable asset. How desirable? That depends on your age, your heirs’ ages, your tax bracket and your tastes in investing. But in many cases you’d be better off dipping into a Roth for spending money than selling anything in categories 1 through 3 above.
Suppose you need to get your hands on $80,000 and your choice is between (a) selling Google shares that you bought long ago at ten cents on the dollar and (b) making an $80,000 withdrawal from the Roth account. If you are in a high tax bracket, option (a) might well compel you to sell $100,000 of shares in order to have $80,000 left after state and federal income taxes.
And let’s say you die not long after. Which would be more valuable to your heirs—$80,000 left in a Roth that would be sheltered from portfolio taxes, but not forever? Or a $100,000 stock position that could be reinvested in a diversified, tax-wise portfolio? For a lot of families, especially the ones that know how to minimize portfolio taxes, the $100,000 deal is the better one. Use option (b) to raise the $80,000.
5. Somewhat appreciated stock. Suppose you own Google shares that have merely doubled since you acquired them. They would be nice to have in an estate, but not as nice as a Roth account. Sell them before messing with that Roth.
6. Taxable IRAs. These are retirement accounts funded with previously untaxed contributions. The money might have come from deductible IRA contributions you made or from rollovers of pretax 401(k)s.
We’ll assume that you have already made any withdrawals from IRAs that you are compelled to make by dint of being 70-1/2 or older. The question is whether you pull out additional sums to cover bills. Sure, if you have exhausted assets in categories #8 and #9 below.
If you cash in a taxable IRA, you pay income tax on the money. If heirs cash it in, they pay. If you’re all in the same tax bracket, that’s a pretty much a tossup.
Except for one thing. Leaving the money in allows it to enjoy more years of tax-deferred compounding.
7. Bonds. If they have gone up at all since you bought them, it was probably only a little. These should be fairly close to the top of your sell list.
9. Depreciated securities. If you bought a security for $30,000 that is now worth $18,000, sell it and claim a $12,000 capital loss deduction. Do this tomorrow. Do it even if you don’t need the cash.
You can get back into the same stock if you wait 31 days. If you are afraid the market will rebound while you are on the sidelines, use the loss-harvesting strategy described here.
Die with an underwater asset and the unrealized capital loss evaporates. This is the mirror image of the step-up rule. If assets are to get a step-up at death, then it’s fair they get a step-down, too.
You can use capital loss deductions to offset capital gains plus up to $3,000 a year of ordinary income. Unabsorbed losses are carried forward to future years. Absent gains, it will take you four years to put that $12,000 mistake to good use.
Alas, unused capital loss carryforwards suffer the same fate as unrealized capital losses when you die. They evaporate.
What if you bought the stock for $30,000, it’s now worth $18,000, and you are quite sure a $12,000 loss deduction will never do you a lick of good? (Example: You already have a giant loss carryforward and you are 90 years old.) Give the underwater stock to your granddaughter. She can’t claim your $12,000 loss, but in her hands the first $12,000 of price recovery is scot-free. She’ll have a taxable gain only to the extent she pockets more than $30,000.
Posted by: Steven Maimes, The Trust Advisor
Fierce Financial IT article by Renee Caruthers
The year 2014 has so far shaped up to be a banner one for wealth management. Charles Schwab’s 2014 Benchmarking Study reported that registered investment advisors (RIAs) in this year’s study had the highest profitability since the inception of the study in 2006.
The Schwab study’s findings have been backed up by firms’ quarterly results. Morgan Stanley has strategically diverged from other Wall Street firms to focus more on wealth management, and it posted strong quarterly results in the first and second quarters of the year when other firms faltered. Morgan Stanley’s wealth management revenue increased to $3.7 billion during the second quarter up from $3.5 billion a year earlier and the bank said client assets in the division exceed $2 trillion.
Royal Bank of Canada also reported that record wealth management was a driver contributing to the bank’s strong quarterly results this year despite slightly declining revenues in the bank’s core personal and commercial banking unit. The bank’s third quarter results rose 4 percent from the prior year, with wealth management posting a record $285 million in net income up 22 percent from the previous year.
With the boon in wealth management, the Securities and Exchange Commission’s new Investor Advocate Rick Fleming, appointed to the role in February, is calling for more frequent review and monitoring of RIAs.
“The SEC examined only about 9 percent of registered investment advisers in Fiscal Year 2013. This equates to a frequency of approximately once every 11 years,” Fleming told an audience at the Southwest Securities Conference in Dallas earlier this month. Calling that level of monitoring “unacceptable,” Fleming said that his very first recommendation to Congress was for funds to allow the SEC to hire more examiners for RIAs without delay.
But beyond asking for funds from Congress, Fleming is looking to make the monitoring of RIAs more self-sustainable year-over-year through the collection of a “user fee” from RIAs that would be used specifically to fund RIA examinations.
“Admittedly, a shorter examination cycle won’t stop all fraud, but I believe it will allow the SEC to halt these types of activities sooner and will provide a stronger deterrent to advisers who might otherwise succumb to the temptation to steal,” Fleming said. “It will also curtail other unethical practices, including excessive fees, excessive trading, and undisclosed conflicts of interest.”
There are other options to consider, such as using third-party auditors to conduct RIA examinations if the SEC doesn’t have the staff to do it, but Fleming considered that option more costly to taxpayers than a user fee structure.
“If the Commission isn’t given the resources to do the job adequately and given them soon, it may be left with few options,” Fleming said.
Posted by: Steven Maimes, The Trust Advisor
From The Times of India
Late Lauren Bacall had kept aside 10,000 dollars of her 26.6 million dollars fortune for her beloved papillon pooch, Sophie.
The 89-year-old actress’s 10-page will gave her three children, Sam Prideaux Robards, Stephen Humphrey Bogart, and Leslie Bogart, equal share in her property as executors of her estate, the New York Post reported.
The Oscar winning star’s will, which was written September 2013, also asked her children to keep her personal letters, writings, diaries and other papers private, and stated son Sam as caretaker of Sophie.
Posted by: Steven Maimes, The Trust Advisor
The Times (nwi.com) article by Christopher W. Yugo
Q: Last week you wrote about the different ways to own rental property. It sounds like you prefer to use an LLC rather than a trust. Isn’t there a way to limit liability and avoid probate? What if you own multiple rental properties?
A: Last week I wrote about how using an Limited Liability Company (LLC) to own rental property will help protect your other assets. Essentially, if you legally establish a LLC and follow all of the formalities, you can limit your personal liability should someone get hurt on the property. Your potential exposure should be the value of the assets owned by the LLC.
To take full advantage of the benefits of an LLC, you need to follow the formalities. Let me repeat that: you need to follow the formalities. What that means is you need to set up a checking account in the name of the LLC and deposit rent payments into it. You need to file your state reports every two years. You want to avoid comingling personal funds and paying personal expenses using LLC funds.
In other words, treat the LLC checking account like it belongs to the LLC, because it does. Don’t pay your personal mortgage or utility bill using an LLC check. Move the money from the LLC account into your personal checking account and write a check from there.
It’s important to treat the LLC as a separate and distinct entity. If you don’t do that, you run the risk of smart lawyer piercing the veil and arguing that the LLC is simply an your alter ego. If that occurs, you expose yourself and your assets to potential liability.
I’m not suggesting that you hide behind an LLC. Make sure you keep the property insured and maintain it. Don’t treat an LLC as an excuse to become a slum landlord. It’s there to protect you under extreme circumstances. It’s not there to let you be a jerk.
You are right that a trust offers you certain benefits an LLC doesn’t, the chief one being probate avoidance. An LLC doesn’t offer the same estate planning benefits a trust can. However, you can use both of them to achieve limited liability and probate avoidance. All you need to do is convey the LLC ownership into the trust. The trust will then own the membership interest. You now limit liability and have a convenient way to transfer ownership of the LLC to your loved ones. Easy peasy.
Finally, owning multiple properties shouldn’t be an issue. You can set up multiple LLCs to limit your exposure to the value of each property or use one LLC and limit your exposure to the value of all of the property in the LLC. Then use a trust to address your estate planning concerns.
- Opinions are solely the writer’s. Christopher W. Yugo is a Crown Point attorney.
Posted by: Steven Maimes, The Trust Advisor
Fox Business “The Boomer” by Casey Dowd
When planning for retirement, boomers need to consider two scenarios: what happens to their estate when they die, and what happens to the estate if they live but aren’t healthy and need to rely on others for assistance on a permanent basis.
Creating an estate plan can help protect boomers’ assets and make sure their wishes are played out in the event of death or if they become disabled and need long-term care and support.
David Cutner, partner at Lamson & Cutner, attorneys for the elderly and disabled offered the following tips for both estate planning and long-term care for boomers:
Boomer: Why should I hire an elder law attorney?
Cutner: Most seniors today ignore the greatest financial risk they are facing — the ruinous costs of long-term care. According to the U.S. Department of Health, 70% of our population over the age of 65 will need some type of long-term care, and more than 40% will need nursing home care for some period of time.
Most people don’t have insurance coverage for this risk (note that Medicare doesn’t cover long-term care), and, if care is needed, their life’s savings will be rapidly depleted and their homes may end up in jeopardy as well if they need it to finance their costs.
Fortunately, solutions are available to protect assets and income, while accessing long-term care benefits under government programs such as Medicaid. An elder law attorney will have the knowledge and experience to provide the advice that you need, and will be able to implement proper and reliable strategies to achieve your goals in this area. It just makes sense at least to have a consultation with an elder law attorney to learn about your options and correct any mistakes you may have made along the way.
Boomer: What makes up a well-designed estate plan?
Cutner: A lot of people worry or wonder about estate taxes, but with the federal exemption now over $5 million, the truth is that only about one-tenth of 1% (0.1%) of estates pays federal estate tax.
However, having a well-designed estate plan still makes a lot of sense to make sure that your assets are passed on in the most efficient way to your beneficiaries and avoid conflicts among your heirs and to minimize court costs and proceedings (probate or administration).
At the same time, I believe that a well-designed estate plan must take into account the financial risks of health care that may be needed, especially long-term care. Otherwise, you could wind up with no assets in the estate, and it won’t matter how good your estate plan was. Your Elder Law planning will avoid or minimize these risks, resulting in a larger estate in most cases. The legal documents used to implement your elder law plan (typically one or more trusts) are also your estate planning documents — they help protect your assets from the ruinous costs of long-term care during your lifetime, and they provide for distribution of those assets according to your wishes at the time of your death.
Boomer: What are some common long-term care mistakes and how can I avoid them?
Cutner: The list of possible mistakes is a long one:
1) Don’t tie up your money in long-term investments where you have no liquidity, or have to pay a penalty to get your money back (e.g., annuities).
2) If you are considering long-term care insurance, make sure that the benefits are adequate, that you have an inflation rider and that you can afford the premium (including any likely increases in premium over time). You don’t want to find that you do not have sufficient cash flows to cover gaps in coverage, and then have to rapidly deplete your assets to supplement your insurance.
3) Make sure that you have proper and adequate advance directives in place, i.e., power of attorney and health care proxy. Be aware that “standard forms” downloaded from the Internet may not be valid, or may lack an adequate scope of powers. The alternative is likely to be an expensive and frustrating guardianship proceeding in court.
4) Poor management of your real estate, e.g., life estates or reverse mortgages can have unfortunate consequences in some cases.
5) Failing to take advantage of possible penalty-free transfers when applying for government benefits such as Medicaid, and spending down on private pay home or nursing home care. Most people believe that they must spend down their life’s savings before they can apply for Medicaid, but this is simply not true.
6) Don’t stay in an investment that should be sold to diversify just because you don’t want to pay capital gains taxes. Taxes should always be considered but a good investment strategy must consider the risk of staying in one or two investments that could lose value, especially if you may need funds for your long-term care needs.
Boomer: What are the top estate planning mistakes and how can I avoid them?
Cutner: Most mistakes can be avoided, but here’s a look at a few common ones:
1) Failing to plan for liabilities and expenses that can be foreseen — particularly long-term care.
2) Failing to update beneficiary designations on bank accounts, investment accounts, retirement accounts, and insurance policies. Don’t just “set it and forget it.”
3) Failing to take steps to avoid conflicts and potential litigation among heirs and family members. A Trust or Will that makes your intentions clear about excluding, as well as including, certain people as beneficiaries can be very helpful.
4) Downloading a will from a legal software company online and signing the document without consulting an attorney. These forms may not comply with the law of your state, and a computer program cannot provide you with proper advice.
5) Transfers of real estate during lifetime, rather than through wills or trusts, may result in high capital gains taxes that could have been avoided.
Posted by: Steven Maimes, The Trust Advisor
LPL Financial Welcomes Financial Advocacy Network and its Four Member Independent Advisor Practices to Broker-Dealer and RIA Custodial Platform
LPL Financial LLC, the nation’s largest independent broker/dealer, an RIA custodian, and a wholly owned subsidiary of LPL Financial Holdings Inc. (NASDAQ: LPLA), today announced that Financial Advocacy Network (FAN) has joined the LPL Financial broker-dealer and RIA custodial platform. The advisors of FAN, a newly launched independent hybrid RIA group that supports four independent financial advisory practices with a total of 13 financial advisors, have a total of approximately $450 million of advisory and brokerage client assets, as of April 15, 2014.
Based in the Washington, DC, area, FAN was co-founded by veteran financial advisor Chris Cox, along with his wife Amy Fernicola Williard, who serves as the group’s compliance officer, and Marty Sullens, the group’s head of business development. FAN’s mission is to empower experienced fee- and commission-based financial advisory practices that seek to be independent, but do not desire to be alone. Towards this end, FAN provides a comprehensive array of compliance supervision services, as well as back and middle office support to independent advisors, designed to enable them to maximize their focus on client relationships.
In addition, FAN seeks to leverage the broad range of intellectual capital and financial advisory experience available among its members to create a network for sharing ideas, capabilities, best practices and business growth opportunities. FAN expects to expand each member advisory practice’s financial advisory capabilities in areas such as asset management, investment research, insurance solutions, and retirement planning, while also providing its member practices with support in areas such as training, recruiting and succession planning.
Steve Pirigyi, Executive Vice President of Business Development at LPL Financial, said, “We are very pleased to welcome Chris Cox and all the independent advisors in Financial Advocacy Network to LPL Financial. Their objective to nurture a broad range of capabilities among FAN’s independent advisors, and then share their common intellectual capital, is a forward-thinking innovation on the advisor group business model, and we are pleased to work with them to help facilitate their vision. We are proud they have recognized that LPL Financial’s combination of flexibility, support and regulatory expertise can help enable the group to move forward. We’re excited to serve as their partner for enabling growth and success for the future.”
FAN’s member advisory practices serve a range of clients across the country, including mass-affluent and high net worth individuals and institutions. Its member independent advisor practices include The Monitor Group, of Rockville, MD, of which Mr. Cox is also a principal financial advisor; Wenger Financial Services, of Newport News, VA; Legacy Wealth Management, of Mt. Pleasant, SC; and Newcorp Wealth Strategies, of Atlanta, GA. All four affiliated practices conduct their fee-based advisory business through FAN’s registered investment advisory (RIA) firm, Maryland Financial Group, Inc.
Mr. Cox, co-founder of FAN and Managing Principal of The Monitor Group, said, “I am very excited by our launch of Financial Advocacy Network, which will enable each of our members to operate as independent advisors while maximizing their capabilities to grow, succeed and learn from one another. As an industry leader in the independent advisor space we feel LPL Financial understands the independent advisor business model like no other partner or potential partner we encountered, and they have been extremely supportive of our vision for our member practices, our network and the independent financial advice industry’s future.”
About Financial Advocacy Network
Financial Advocacy Network (FAN) is a community of entrepreneurial, independent advisors brought together by the desire to achieve exceptional practice management, access high quality resources and engage in a culture of shared knowledge and experience to enhance individual practices and the overall success and value of their businesses. Based [in the Washington, DC, region/Rockville, MD], FAN currently includes The Monitor Group, of Rockville, MD; Wenger Financial Services, of Newport News, VA; Legacy Wealth Management, of Mt. Pleasant, SC; and Newcorp Wealth Strategies, of Atlanta, GA. FAN members conduct their fee-based advisory business through Maryland Financial Group (MFG), an RIA owned by FAN. FAN was founded by Christopher Lee Cox, a financial advisor since 1997; his wife, Amy Fernicola Williard; and Marty Sullens. In total, FAN has approximately $450 million of assets, as of April 15, 2014.
About LPL Financial
LPL Financial, a wholly owned subsidiary of LPL Financial Holdings Inc. (NASDAQ: LPLA), is the nation’s largest independent broker/dealer (based on total revenues, Financial Planning magazine, June 1996-2014), an RIA custodian, and an independent consultant to retirement plans. LPL Financial offers proprietary technology, comprehensive clearing and compliance services, practice management programs and training, and independent research to more than 13,700 financial advisors and approximately 720 financial institutions. In addition, LPL Financial supports approximately 4,500 financial advisors licensed with insurance companies by providing customized clearing, advisory platforms and technology solutions. LPL Financial and its affiliates have more than 3,000 employees with primary offices in Boston, Charlotte, and San Diego. For more information, please visit http://www.lpl.com.
Posted by: Steven Maimes, The Trust Advisor
Triad Advisors Launches Triad Hybrid Solutions Providing Benefits of RIA Firm Ownership for Independent Advisors, Without the Same Regulatory Complexity and Costs
Triad Advisors, Inc. today announced the launch of Triad Hybrid Solutions, a new Registered Investment Advisory (RIA) entity serving fee- and commission-based independent financial advisors. As part of this announcement, the company stated that Michael C. Bryan, Senior Vice President, Advisory Services, will serve as CEO of Triad Hybrid Solutions.
The new RIA primarily targets comparatively small to mid-sized independent advisors seeking the most advantageous attributes of owning their own RIA firms while offloading growing regulatory complexity and costs to a proven industry expert. In addition, Triad Hybrid Solutions offers IARs the maximum flexibility of custodial partners typically associated only with RIA firm ownership. Triad Hybrid Solutions will enable its affiliated independent advisors to utilize multiple leading custodians including Charles Schwab & Co., Fidelity Institutional Wealth Services, and National Financial Services, LLC. Further custodial partnerships with top providers are anticipated later this year.
Triad Hybrid Solutions expects to attract investment advisors of RIAs that deal with multiple state registrations, those who do not have the desire to dedicate staff and resources to RIA maintenance, or breakaways from wirehouses who may prefer an established structure. The association with Triad’s well-known broker/dealer also gives financial professionals the ability to offer products and services in a true hybrid business model serving clients on either a fee or commission basis.
Additionally, Triad Hybrid Solutions will offer the benefits of customized, end-to-end practice management support through industry-leading third party providers, all delivered at a cost that smaller RIA firms would be unlikely to afford. This includes top-of-the-line resources such as Advent Software’s Black Diamond portfolio management and performance reporting technology as well as Salesforce.com’s customer relationship management (CRM) solutions.
Michael C. Bryan, Senior Vice President, Advisory Services, said, “Triad Hybrid Solutions meets a rapidly growing demand among an overlooked yet sizable segment of the independent advisor population. Advisors can leverage our extensive experience in the hybrid space, access industry-leading tools, and take comfort in knowing we manage the significant challenges of compliance and regulatory changes. Advisors are free to grow their own businesses with confidence.”
Nathan M. Stibbs, Senior Vice President, National Business Development, said, “For years, Triad Advisors has been a pioneer in providing hybrid independent fee- and commission-based financial advisors with the most accommodating structures for successfully pursuing their individual business models. The rollout of Triad Hybrid Solutions presents an important new offering in the broad range of our capabilities and reinforces our well-established leadership position in the industry.”
About Triad Advisors:
Headquartered in Atlanta, GA, Triad Advisors, Inc. is a national, independent broker-dealer and multi-custodial SEC-Registered Investment Advisor (RIA) that is an early pioneer and continued leader in the Hybrid RIA marketplace. The company provides a comprehensive platform of products, trading and technology systems, as well as customized wealth management and practice management solutions to over 550 advisors nationwide, the majority of whom operate their own Hybrid RIA firms.
Recognized as one of the most successful and fastest growing independent broker-dealers in the industry (including being named the leading broker-dealer for Hybrid RIAs from 2009-2012 by Investment Advisor Magazine), the company was created expressly around the vision that independent financial advisors are best served when they are empowered with the capability to seamlessly integrate fee and commission-based services for their end clients. Triad Advisors is a wholly-owned subsidiary of Ladenburg Thalmann Financial Services Inc. (NYSE MKT: LTS). For more information, please visit www.triad-advisors.com.
Source: PR Newswire
Posted by: Steven Maimes, The Trust Advisor